For the people interested in SAP HCM (or SAP HR) area or those related to SAP in some way who want to get a brief on the groundbreaking technological changes SAP underwent in the past decade changing the shape of the ERP market...

After reading this article, you will get the answers to the following questions: What was the need of a new term "HCM", when there was already one - "HR"? What does the transition from R/3 Enterprise to SAP ERP mean? What are the technological changes SAP has undergone from standalone R/3 to SAP ECC?

(Updated on May 10, 2015) If you have worked in HR module (as has been and being termed mostly), you know that it is a huge area and everyday there is something new to learn. Challenges were especially considerable for the technical consultants when new technologies and applications were being added one after another.

Transition from R/3 Enterprise to mySAP ERP mainly involved underlying technological basis. So from functional point of view most of the things which applied earlier for R/3 HR module applies to mySAP HCM as well.

The industry still uses the term "HR" for the Application now officially named "HCM" though for past few years it has been fastly adapting it. In contrast to HCM, the term "HR" represents the business process/es involved without reference to know-hows of SAP. We generally use the term "SAP ERP HCM" or just "HCM" when we are not talking about the HR component in R/3 or its successor ECC but are looking at the broader range of the software package including systems outside R/3 or ECC such as E-Recruiting, Portal, etc.

SAP HR has officially been named as HCM to support functions which go beyond a company's HR functions. That explains the use of a new term to mark the distinction. For example, Payroll belongs to Accounting actually (if we talk in terms of business process/es), hence goes out of HCM.

The term SAP ERP HCM mainly refers to the broader range of the software package including systems outside ECC, such as E-recruiting, Portal,etc. A line of separation is drawn between the parts that SAP formerly referred to as PA and PD. Although no longer officially used, there are still reasons for making this distinction.

There is a difference in the technical implementation, which is also reflected in the system configuration. Until Release 4.6C, R/3 system is a one piece business software solution. Together with other modules from the areas of Logistics and Financials / Accounting, SAP R/3 HR builds the R/3 application level. All of these modules use the same technological base - "SAP Basis" which allows them to interact with each other and the rest of the world. It also provides a very good software development environment for the SAP programming languages ABAP/4 and ABAP Objects.

SAP R/3 Enterprise brought two major technological changes :

1- The application was split between the Enterprise Core and the Enterprise Extension Sets. The extension sets were concieved as a way to bring new functionality in well-defined portions to each module. HR has its own series of extension sets and can be updated without a major upgrade that would involve all other modules as well. Moreover this concept keeps the number of changes in the Enterprise Core low, thus improving stability. As a rule, a new set of extension sets is issued once a year.

2- The SAP Basis was replaced by the Web AS which brought major improvements regarding interfaces with other systems and facilitates development of Web integration. ( mySAP ERP Editions : mySAP ERP 2003 had R/3 Enterprise. The version of SAP ECC Core included in mySAP ERP 2004 is the "ECC 5.0" and in mySAP ERP 2005 is the "ECC6.0". Some changes are made with mySAP ERP 2005 especially concerning E-Recruiting. )

With mySAP ERP Edition 2003, the New-Dimension products (BW, EP, CRM, E-Recruiting, Learning Solution, etc.) were bundled together with R/3 Enterprise under the name of "mySAP" mainly for the convenience of customers who wanted to buy a whole solution family, as well as for the marketing purposes.

With mySAP ERP 2004, arrived the ERP Central Component (ECC) - the successor of R/3 Enterprise. Like R/3 Enterprise, there are "ECC Extension Sets" as well "SAP ECC Core". There are Additional Components which are not technically integrated into one system.

This probably demystifies the big jargon around mySAP ERP which actually troubled me till I deciphered out what actually differentiates it from the comfortable (for me and lot of other people) SAP R/3. mySAP ERP now is powered by SAP Netweaver platform which makes the whole stuff more and more web-enabled. SAP Netweaver is much more powerful than Web AS alone.

Integration among different applications and Collaborative capabilities are the key factors. SAP ERP aligns the people, processes and information across the organizational and technological boundaries. This is a business suite of applications like R/3 applications, Additional components like (sometimes called New-Dimension products) CRM, SCM, SEM, etc.

On the front of technology SAP Netweaver powers SAP ERP which offers Application platform ABAP and J2EE and products like Enterprise portal, BW, E-Recruting, Learning Solution, etc.

SAP has released some exciting new HCM functionality which they have called “HR Renewal 1.0” that encompasses several solutions including Learning, Employee and Manager Self-Service, Personnel Administration (PA), Organization Management (OM) and HCM Processes and Forms (P&F). You may want to read a brief on it.

References: 'Mastering HR Management with SAP ERP HCM' from SAP PRESS; Authors : Christian Kramer, Sven Ringling, Song Yang
The book is recommended only for SAP functional consultants and deals with the functional / business process aspects of SAP HCM module.

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